Australia PM drops parental leave plan, says no intention to quit

SYDNEY (Reuters) - Australian Prime Minister Tony Abbott on Monday dropped a signature plan for paid parental leave and promised a more consultative approach on economic and security problems, seeking to stave off mounting criticism of his leadership.

Abbott, 16 months into the top job, has faced a series of challenges including an economy battered by a plunge in commodity prices as well as broken election promises, policy back flips and perceived gaffes.

Pressure on him soared after last week's decision to award a top honor to Britain's Prince Philip, Queen Elizabeth's husband.

More questions about his leadership were raised after a disastrous state election on the weekend, when the Queensland Liberal-National Party, closely aligned with Abbott's Liberal-National coalition, surrendered the largest political majority in Australia's history after just one term in office.

In a speech dubbed by some commentators as the most important of his political career, Abbott outlined his priorities including job creation, helping families, building roads and strengthening national security.

He said he had not considered stepping down.

"This will be a test of character," Abbott said in response to a question about his leadership at the National Press Club in Canberra.

"Politicians pass the test when they do what is best for the long-term, not when they give in to short-term fear and make a difficult situation worse."

Abbott said he believed he had the full support of his deputy party leader, Foreign Minister Julie Bishop, who along with former Liberal Party leader Malcolm Turnbull, has been touted as a potential replacement.

In an effort to shore up support from both his party and the public, Abbott announced he was scrapping his A$5.5 billion ($4.3 billion) paid parental-leave scheme, a plan that had been criticized for being too expensive and made without consultation with colleagues.

He said he took responsibility for his decisions.

"I accept that the paid parental leave scheme was a captain's call," Abbott said. "I accept that the restoration of Knighthoods was a captain's call. They are the two captain's calls which I have made but I have listened, I have learned and I have acted."

A new poll out on Monday showed approval for Abbott's performance had plumbed fresh lows at 29 percent, versus 67 percent disapproval.

Less than a third of those surveyed expected Abbott to lead into the next election, due in about 18 months.